Aug 24, 2012

Are Foxconn's Chinese Internships Now Better Than American Internships?

Ok, forget, if you can those stories about unhappy workers throwing themselves out of windows. They're working on it.

And they're being monitored. To the extent that even their internship programs are getting attention - and that's 180,000 interns, thanks very much. Who, we'll add, since you might just be curious, are PAID. Cash money.

So think about that as you trundle off to gather up another round of half caf/decaf soy lattes, you unpaid drones.

Yup, everyone's favorite bogeyman employer has gotten to the point where even interns are being treated like human beings. Make no mistake, there are still some issues. Internships in the US may be time-wasting, morale-sapping, boredom-inducing nonentities, but rarely does the phrase 'employees being held prisoner,' ever seem to enter the managerial self-improvement dialogue.

The Foxconn CEO has acknowledged that the thought of being the employer of over 1 million people 'gives him a headache.' And who can blame him? But given that many US interns are lucky if they even make it to afterthought status, this is an interesting development. Joking aside, this falls into the realm of disruptive innovation. The Chinese are learning from their past experiences. And they have demonstrated that they are pretty good at applying what they learn. JL

Austin Carr reports in Fast Company:

Under intense scrutiny from the Fair Labor Association, the Apple supplier has revised its labor policies, including changes to its internship program. Now one of the paragons of bad labor practices is treating interns better than most U.S. companies Earlier this year, Apple submitted itself to an audit by the Fair Labor Association due to widespread criticism of conditions at Foxconn, Apple’s largest overseas supplier. The FLA’s findings were alarming--insufficient salaries, excessive hours, overcrowded living environments, various labor law violations--and Apple promised changes. Yesterday, the FLA released a status report tracking whether steps are being taken to improve workplace conditions, and it appears Apple’s manufacturing partner is making progress, even in one oft-overlooked area: Foxconn’s internship program.

Foxconn is said to employ as many as 180,000 interns in a system that has been described as being "rife with abuse." Under intense scrutiny from the FLA, the company is taking action to enhance safety and fairness--to address concerns that might sound familiar to anyone who has held an internship in America: labor exploitation, irrelevance to field of study, and so forth. While the FLA’s audit of Foxconn’s internship practices revealed far more serious issues than one might find in your typical fashion or marketing internship in Midtown (preventing unlawful work hours, verifying liability insurance, and providing measures so "interns do not ever feel that they are working against their will"), its new policies are perhaps ones that many unpaid and overworked interns in the U.S. would like to see replicated here.

Of course, some of the previously problematic aspects of the Foxconn internship are totally alien, like holding their interns prisoner. According to the FLA’s report, Foxconn has created policies to ensure that its internal practices and procedures pertaining to interns reflects national and provincial regulations. ("These include the ability to leave the facility prior to the completion of the program.") Others, for anyone who has had an internship where they ended up just changing the copier toner, might resonate: Foxconn has also updated its hiring policy "to ensure that the job relates to the intern’s field of study" and that interns’ "skills before and after" are measured "to document the benefits of the training." And the company is also said to have taken measures to ensure fair wages, prevent 40-plus-hour work weeks, and (again with the kidnapping) make sure interns are aware that they "have the right to join and/or leave the program freely."

Still, while such changes are signs of progress made in improving workplace conditions, the FLA’s verification is mostly reviewed at a policy level. Though the FLA specifies that updates to Foxconn’s internship program were "verified via random interviews with interns at Longhua," in the summary of its status report, the FLA indicated that there were just 46 interns at Longhua, one of the three Foxconn facilities it audited for the report. Longhua is an iPad and iMac assembly unit; according to the FLA, there were no interns at the two other facilities it reviewed, Guanian and Chengdu, which is an iPhone assembly unit. Auret van Heerden, CEO of the FLA, has acknowledged that Foxconn still faces challenges ahead.

It’s hard not to draw comparisons to relevant complaints of U.S. internship programs, which are widely considered to flaunt regulations without much scrutiny, as The New York Times has reported, citing the Labor Department’s acting director of the wage and hour division at the time, Nancy J. Leppink. "Leppink said many employers failed to pay even though their internships did not comply with the six federal legal criteria that must be satisfied for internships to be unpaid," the Times wrote in 2010. "Among those criteria are that the internship should be similar to the training given in a vocational school or academic institution, that the intern does not displace regular paid workers and that the employer 'derives no immediate advantage’ from the intern’s activities--in other words, it’s largely a benevolent contribution to the intern."

It’s a testament to the scrutiny that Apple is under for the Foxconn issue (and what Apple’s position in the corporate world does to create that kind of focus) that its third-party factories in China are now being forced to monitor their interns in a way that no U.S. company would consider. For instance, Foxconn is also now required "to work with sending schools and colleges" to measure the effectiveness of internships. "Each Foxconn factory using interns has … designated a taskforce that will interact with teachers accompanying interns to obtain feedback on the benefits of the training and internship," the FLA said. "Subsequently, an evaluation report shall be provided to the school."

Additionally, Foxconn’s policy indicates that interns "receive the same entry wage as other entry-level workers doing similar work and that such wages are always above the minimum wage for that area." In the U.S., as the Times reported, "hundreds of thousands of students hold internships each year; some experts estimate that one-fourth to one-half are unpaid."

So for all you wide-eyed college students chafing under the yoke of an awful, unpaid internship, consider reminding your boss that they’re now treating you worse than one of the most notorious workplaces in the world.

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As a Partner and Co-Founder of Predictiv and PredictivAsia, Jon specializes in management performance and organizational effectiveness for both domestic and international clients. He is an editor and author whose works include Invisible Advantage: How Intangilbles are Driving Business Performance.Learn more...